Cautiously into Q2 2024

Investment Analysis Clubs Hohum's RollerCoaster Ride
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04/01
Mood has shifted as the market enters Q2 2024, as I’m not as excited as I was in Jan 2024. The mood shift started about two weeks ago. Now, I feel many ideas seem fairly valued, or perhaps, slightly ahead of where they should be trading.
Today

  1. I was going to buy more LPG (as a “replacement shares” case), but LPG decided to bounce out-the-gate … never mind.
  2. Was going to add to GCT - shares bounced even more than LPG … never mind,
  3. Pivoted to the sell side. By selling a huge chunk of higher priced IEP units, I opted to clean up a “disaster”. Primary reason for the move - next distribution news is not likely in the next month. That leaves IEP price to percolate quietly for a month. LP unit tax math is different, so I have to wait for IEP to send me the paperwork.
  4. In Roth ac, added to ABEV stake.
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Mar 30 is end of quarter. We are waiting for earnings to start in a few weeks. Companies are in a silent period while they assemble their numbers to report. That allows wild rumors to circulate unchallenged. A great time for shorts to play with public perceptions and drive down prices.

Meanwhile pros seem to think many stocks are fully valued based and info available now. So they trade over a narrow range and wait for news.

We are hoping for continued advances in earning and expecting stock prices to respond once the numbers are public.

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@pauleckler - Thanks for the comments and perspective.

  1. Yes, earnings will be coming along soon. But, I was thinking more second of third week of April before those start trickling in.
  2. There probably are some undervalued names out there. But one probably needs to turn a lot of stones in the small cap and microcap arena to find them
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Pesonally i prefer growth stocks that aren’t over valued. My experience is they do best.

That is not unlike Charlie Munger teaching Warren Buffett that cigar but? companies are not a good choice.

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growth, high-yield, value, GARP, safe – all are just named boxes that folks use to categorize stocks into.
#1 BRK-B (Up 17.46% YTD - is that value or growth?)
#2 FLNG (Down 10.81% YTD value or growth?, definitely high yield)
#3 QCOM (up 18% YTD [edit] yes as a GARP idea. Do I expect share price to continue expanding @ 18%/qtr? growth likely, but not at the YTD rate.
Just explaining my issue with labels/named boxes

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04/01 - 04/05
Some reshuffling moves this week

  • Reduced NPWR on the price bounce
  • More ABEV in Roth ac (lowers my cost basis)
  • Trimmed WU in Roth ac
  • Closed out GSL in taxable ac
  • More INTC in taxable ac
  • Added to CELH in Roth ac

Seems like CPLP is executing on their strategy - container vessels are being sold (6 vessels in two transactions).

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Last week (04/03) AY received a downgrade from a National Bank of Canada analyst–
https://seekingalpha.com/news/4086969-atlantica-sustainable-cut-at-national-bank-on-lack-of-clarity-on-strategic-direction

Multiple items in the URL

  1. AY acquired two wind assets in Scotland for $66M. One issue there is that AY paid about 6.6 times EBITDA for the two assets.
  2. Analyst has a list of reasons including unfinished strategic review, and limited visibility on growth.

For #1 - Seems kinda expensive
For #2 - Is the uncertainty with AY or with AQN? Seems like AY is stuck until AQN make a firm decision on the scope of renewable assets they want to dispose. On the growth side, AY has the Coso batteries project in the works. The deal in #1 - okay, meh in terms of growth.

This week, been dumping TSLA from tax-advantaged accounts. Hasn’t been a lot of positive news for TSLA. Figure I can recycle the name, and pick up shares a little lower.

Added a little more INSW, LPG and VERI this week.

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04/08 - 04/12
In a clean-up mood this week

  • Sold much of my TSLA position in Roth ac
  • More LPG in taxable ac
  • Trimmed FRO in Roth ac
  • More INSW in taxable ac
  • Restart GOGL in taxable ac
  • Trimmed AY in Roth ac
  • More VERI in Roth ac
  • Initial VERI in taxable ac
  • More SE in Roth ac

The FRO & AY trim decisions occurred when share price in each had bounced. Sifting the tea leaves, thought the AY bounce (in particular) was unusual. I did think I could buy back the shares lower - just did not think the opportunity would present itself two days later. I haven’t acted on the development just yet. AY decision is more complicated due to the fact that I own (very underwater) AY shares in taxable ac. A significant AY position, so a 5% drop gets magnified.
First NVDY payout this week - exciting, … but I do recognize the underlying entity has been quite bouncy … the last week (very much so).

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Markets like today (04/15) prove challenging. Is it because today is tax-filing deadline?
Sure, it might be logical to crawl under a rock, or, sit on one’s hands (no trading). Or it might make sense to sift the tea leaves, and decide if some idea seems too beaten up. I opted on the latter.

  • More VERI when it slipped under $4.85/sh
  • More AMBP for DRIP ac
  • CLCO was appealing - maybe tomorrow.

The AY action last week looking really good. To a lesser degree, the TSLA move also looks decent.

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04/16 - 04/19
Ugh! With some major names sliding - Tough week.
QCOM, TSLA, NVDA, CELH - that TSLA position trim looks very timely.
Had not been checking IBD closely until about an hour ago. NVDA had been #1 last week, and plunged - Out of the Top 30 this week. Still positive YTD. But, it has been an annoying beat-down.

Other events this week

  • Resetting AY in Roth ac. Most of the position cleared. Will consider restarting if the share price slips below $17.75
  • Timing of QCOM nibble was off. Shares continued to slide.
  • More VERI
  • Somewhat of a panic move with MBLY. Decided to dump the entire stake. Both bites were positive.
  • IEP distribution arrived.
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04/24
Sat on my hands to start the week, then today became active.

  • More CELH in Roth ac
  • New idea in taxable ac - GCTS
  • More FRO in Roth ac
  • Trimmed NPWR in taxable ac
  • Restarted VEEV stake - nibble in Roth ac
  • Unplanned NVDY nibble in taxable ac.

For some reason, AY is up over 10% in 2 days. Volume increase the last three days, in particular 04/23. [Shoulder shrug - happens sometimes]

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04/26
To close out the week, a couple of transactions

  • After skimming Hafnia’s Q4 2023 results, took a starter position. HAFN mgmt suggested the NAV is fairly level with current share price, so it isn’t actually a deep value pick.
  • Is KNSL a falling knife? Price plunge of over 17% after beating on both rev and earnings made me consider it a FK. Took a small stake in taxable ac
  • As has been common in 2024, NVDA bounced out the gate.
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05/02

  • Add to BRK-B. Wider gap with #2 FLNG
  • Nibble on FLNG. Gap with BRK-B narrowed
  • QCOM bounced by itself, and thus remained in 3rd position. Narrowed its gap with the front-runners
  • BRK-B and FLNG moves both in Roth ac. That made letting go of GSL > $23/sh easier.
  • Waited the requisite days, so no wash on today’s IEP purchase.
  • Exited DSX for a small loss. Still have the DSX warrants.
  • Locked in GCT gains. Just felt like trading the pick as it is quite bouncy.

Moves earlier in the week

  • Added KNSL in Roth ac
  • Nibble on BROS in taxable ac
  • Exited BNS in Roth ac
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Correction on my Top 5 holdings
05/01/24

  1. FLNG
  2. BRK-B
  3. QCOM
  4. AAPL
  5. AY

05/02/24

  1. BRK-B
  2. QCOM
  3. FLNG
  4. AAPL
  5. AY

05/03

  1. BRK-B
  2. QCOM
  3. FLNG
  4. AAPL
  5. FRO

05/03
VZ nibble

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05/08
Quiet trading week so far.
Added again to IEP on 05/07. Timely addition as IEP bounced today.
Conventional tanker companies have started reporting:
INSW (reviewed)
ASC (not reviewed yet, but dividend hiked from 21c => 31c … could explain the15+% price bounce today)
BROS bounced on positive results - another of my Top 10 have reported
Edit: AY also reported today. North America keeps growing, South America keeps growing, EMEA declines. Div maintained. COSO making progress, 2 wind assets in UK (NOLs might help, but was initially not too impressed)

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One of the purposes of this board is to document transactions, or provide a timeline if you will. Another is to document events - good or bad.
So here’s a bad one, and involves AY in the Roth ac. Since one can’t take losses in a Roth ac, the plan had been to attempt a “reset” (sell a chunk of AY shares and repurchase shares slightly lower). Too bad for me, as AY decided to rebound 19% after I trimmed my AY stake :frowning:

Read the AY’s Q1 2024 earnings call transcript yesterday.
The obvious boulder pushing on AY is what is going on with major shareholder Algonquin (AQN), who own over 40% of AY. At least to me, a new project really stirs the pot. So AQN had completed a strategic review, and announced plans to sell its renewable energy segment. From what I can tell, although AY can be be considered as primarily a renewable energy business, the stake that AQN owns is an investment rather than part of the renewable energy segment (hydro, solar and wind assets that AQN owns separate from its AY stake). So what’s the new project?
AY acquired a new development asset referred to as Imperial from … Algonquin (AQN). Or, put a different way, if AQN are planning on getting rid of its AY stake, selling AY an asset that is currently in its renewables segment doesn’t make a lot of sense. More so, as the Imperial asset is a development asset (AY needs to spend additional resources to get the asset to revenue-generating mode).

https://seekingalpha.com/article/4690705-atlantica-sustainable-infrastructure-plc-ay-q1-2024-earnings-call-transcript#comment-97819243

Awhile back, in some AY threads, there was a suggestion that Brookfield (which has a renewable energy business) might have an interest in AY. More recently, a new entity has been bandied about – Energy Capital Partners

Is that the reason for AY’s rebound the past month?

Q1 2024 dividend unchanged
FWIW, AY also has a strategic review in place. But during the earnings call, AY mgmt said, please don’t ask us any questions related to the strategic review.

–
TRMD announced results today - very positive, and helpful for the dividend basket. That’s four significant payouts (NVDY) or announcement of payouts (AY, INSW, TRMD) in just the last week.

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Week ending 5/10
Besides the IEP transaction, a few other events

  • PLTR nibble in taxable ac
  • More COHR in taxable ac
  • More NVDY in Roth ac
  • More NKE in Roth ac

Good week for the shipping basket names - while no individual name jumped more than 12%, I will take the overall uplift (FLNG’s rise moves it back into top holding of self-managed port). Have to skim thru AQN’s CC which occurred today. Do know AQN missed both rev and earnings estimates.

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As AY is still a significant holding, I went and perused the Algonquin (AQN) results. A few items

  1. The interim CEO is now the official CEO
  2. The plan to sell the renewables segment is still on schedule, with a caveat (see #3)
  3. Renewables will be sold piece-meal
    a. Solar energy & wind energy assets initially
    b. Hydro assets
  4. AQN mgmt mentioned selling some assets to AY. But, not the primary asset mentioned in the AY call (might be explained by timing of events). AQN mgmt mentioned selling some solar asset in Spain to AY (which was also mentioned by AY mgmt)
  5. A renewables segment sale time-line - end of 2024 to finalize the sale of renewables segment. But, given there is now 3a and 3b, finalize one slice or both?

With my AY “reset” plan backfiring on me, and acknowledging Mike Tyson’s line “Everyone has a plan, until they get punched in the mouth”, it probably is sane to consider a target price for another (at least partial) AY sale. A nice round figure - $25/sh.

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05/14
Two shipping entities, SFL & NMM, reported today. Have not dug too deeply into either companies results other than to note that SFL announced a div hike to 27c/sh. NMM had announced a couple of weeks back - 5c/unit distribution.
At this time, neither are appealing wrt to a major investment. Small investment or nibble? Maybe, just depends on further digging of each company.

Trimmed GSM in Roth ac.
[edit]
Trimmed AEHR in Roth ac
Closed out token NVDY in taxable ac
AY retreating

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05/15
Trying to find the happy medium - On the one hand, I am dealing with good bounces from a variety of names, and across multiple sectors. There’s also sell-in-May thoughts. On the other hand, is this the makings of a blow-off top? Not sure. Yesterday, I sold a small slice of GSM in the Roth ac. Today, even though GSM announced decent results, I trimmed the GSM stake in the taxable ac. Then I restarted GCT in taxable ac.

TRMD took GSM’s ranking after the Roth ac trim. GSM regained the spot today, but only briefly. Once I sold additional GSM shares, Torm regained the #10 spot. How far can BROS run? No idea. If BROS crosses $40, I might consider taking some off the table.

Interesting idea crossing my radar - IESC, a company that is providing solutions for data centers. Seems like a nice niche with room for growth.